Why we don’t have Paypal in SAfrica

Eve Dmochowska    Uncategorized    

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Yesterday, at the 27 dinner I had an interesting chat with Andy Higgins from Bid or Buy fame. Andy is also involved in Payfast.co.za, which is the latest payment gateway to hit our web scene. One of the features that Payfast is working to implement is credit card transactions (right now they enable EFT transfers).

Any discussion around payment gateways of course always leads to the “Why don’t we have PayPal here?” questions. Andy made a very good point: we don’t not have PayPal here becasue of exchange controls, as most people think. Rather, the Reserve Bank is very wary of allowing a money system that is “two directional”.

In other words, they are happy to accommodate a system to which you deposit money, and that money gets passed onto someone else (such as a credit card merchant). Not so happy with a system to which you can deposit AND withdraw money.

With a two directional system, you could start treating PayPal as your bank, especially for your savings account. I can see why that would make the Reserve Bank very, very nervous.

I suppose they are erring on the side of caution. We can scoff, but then again we are not in the financial crisis that the US is. Nevertheless, I would love to have 30 minutes with the person/team responsible for making these decisions, so I could explain to them that in this instance it is actually hampering our online economy. Probably our economy, period.

(Having said all that, I think there are ways to get a two directional PayPal account anyway. I am toying with some of them now, and am just waiting to find out if they are strictly “legal”. Or rather, if they are strictly “illegal”. If not, I will post on the topic in due course. And if you have an overseas account, you can get two directional PayPal).

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